The Comprehensive List of Odd Tax Deductions

By Kars4Kids Hub
May 10, 2023

The Comprehensive List of Odd Tax Deductions

Since taxes have existed, Americans have been trying to exempt themselves.

Here are some interesting things that can be deducted, as well as some things that cannot:

1. Ship Repairs

Whaling captains can claim up to 10,000 for ship repairs and equipment. However, you’d better be a Native American if you want to be a whaler in the USA.[1]

2. “Exceptional” Trees

If you have an araucaria heterophylla—commonly known as Norfolk Pine—in your backyard, you’re in luck. At least if your backyard is in Hawaii. The Norfolk Pine is considered an “exceptional tree” in the Aloha State, and you could get a $3,000 deduction to maintain the special species.[2]

3. Moving Expenses

Moving a pet is sometimes deductible. If you have to move for work, you can deduct your moving expenses. That includes moving your pet and any expenses involved.[3]

4. Restitution in a Fraud Case

An insurance company sued two doctors for insurance fraud. The doctors admitted liability and agreed to reimburse the insurer for the losses it sustained, and the insurance company agreed to release a claim for restitution in a pending criminal case. The IRS ruled that the repayments are deductible provided that the doctors originally included the money in their incomes in prior years. But to demonstrate that crime doesn’t fully pay, the IRS said the repaid funds are a miscellaneous itemized deduction that’s allowed only to the extent it exceeds 2% of the doctors’ adjusted gross incomes.[4]

5. Swimming Pool

A swimming pool is deductible if it’s necessary for medical purposes. But it’s not easy to prove. You may have to show that no one else uses the pool. It also depends on your ability to travel to and access a similar pool.[5]

6. Tax Breaks for Drug Dealers

If you make your money dealing illegal drugs, getting your taxes right might not be high on your list of priorities, but just because the money is made illegally, doesn’t mean the IRS won’t accept taxes on it. The Tax Court has clarified some potentially helpful details on the situation. (Remember, sometimes tax evasion is easier to prove than more insidious crimes. Think Al Capone.) Baggies and soil for marijuana plants are not deductible. Neither is the apartment you work from or the cost of your security team. However, you can deduct the cost of your product.[6]

7. Quitting Smoking

Costs of programs or prescription patches and other drugs. Over-the-counter patches and other quit smoking items are not deductible.[7]

8. Defense Costs for Criminals

If you lose in a criminal case, you can deduct your legal fees. As a criminal, your defense is considered an “ordinary and necessary expense.”[8]

9. Losing Weight

Weight loss programs may be deductible, but only on doctor’s orders for obesity and not for appearance’s sake. Obesity is classified as a disease in our tax code.[9]

10. Kidnapped Children

You may be able to claim as a dependent a child kidnapped by a non-family member.[10]

11. Deadbeat Friends

That cash you lent your friend in a pinch? Even if they skip out on repaying you, all is not lost. You can write off the unpaid amount if there’s no hope of collecting payment.[11]

12. Ostrich Depreciation

As their livestock age, farmers can deduct the depreciated value from their taxable income if the animals are used for breeding. In the past, the IRS allowed a Louisiana ostrich farmer to depreciate the cost of his ostrich.[12]

13. Bow & Arrow

Straight as an Arrow? The government has long imposed an excise tax on arrows, with the money raised going to fund wildlife restoration. Now an excise tax of 46 cents, as of 2012, is imposed on arrows that are more than 18 inches and/or are suitable for a specific kind of bow with a specific amount of draw. Wooden arrows designed for use by children are exempt. Obviously.[13]

14. Rewards for Renting

If you rent space for fewer than 15 days in one calendar year, all the related income is completely tax free. If you rent it out for more than 15 days, “your income is taxable as rental income and you could allocate certain expenses,” says H&R Block’s Gil Charney. So listen up, those of you who live in Massachusetts or Pennsylvania: Two weeks is the max for renting out your house for the Super Bowl. Hamptons homeowners likely already know the rule.[14]

15. Pregnancy Tests

This deduction is specifically listed in the tax code, but that doesn’t make it any less odd. So go ahead and stock up on those tests at the pharmacy, because there’s nothing in this deduction that requires the test be administered by a physician.[15]

16. Transportation to Donate an Organ

An organ donor can deduct any medical costs associated with the donation, including the transportation costs.[16]

17. Making Movies

Lawyer Lee Storey faced a challenge from the IRS when she sought to deduct losses for the six years she worked on a documentary film, Smile ‘til it Hurts: The Up with People Story. The IRS claimed the long series of annual losses she sustained indicated that her film-making activities were a mere hobby, pointing out that since her husband once was a member of the music group Up With People, the project was only a type of high-cost home movie.[17]

18. Fancy Dresses…

But only if they’re so tight you can’t sit in them. Late celebrity Dinah Shore claimed some formal dresses on her returns, and the IRS immediately called her on it. Dinah explained that the gowns were business expenses; she only wore them on her television show and that they were so tight she could never have worn them for personal reasons: she couldn’t actually sit down in them. In what must have been a humiliating (or humorous, depending on how you look at it) experience for Shore, though the IRS agreed to let her deduct the dresses, the legend is they sent a guy to see which dresses really were too tight to allow Ms. Shore to sit.[18]

19. Amish Buggy

Well, it wasn’t the buggy that was questionable – it was used for business and is a legitimate expense. It was the tricked-out accessories the young Amish man wanted to include on the write-off: dash lights, kick plates, tinted windshield, speedometer, hydraulic brakes and dimmer switches.[19]

20. Foreign Nationals Gambling

Foreign nationals gambling legally in the US are exempt from the 30% withholding tax on their winnings that Americans must pay.[20]

21. Selling Songs

Songwriters selling a catalog of their songs can claim it as a capital asset, and pay the capital-gains tax rate—15% or less—rather than the income tax rate—which can go up to 35%.[21]

22. Deep Sea Fishing

As long as business discussions are conducted and considered in the cost of doing business, it would be possible to deduct this type of expense. It is difficult to inspire investments and other funding if you are unable to impress clients to some degree. Understand just how much of these types of expenses can be deducted before filing your return. [22]

23. Bariatric Surgery

Want to lose a couple of inches this year? In 2002, the IRS ruled that obesity is a medical disease, which means that specific treatments aimed at curbing obesity are allowable deductions, including bariatric surgery. As with all medical expenses, you can only deduct unreimbursed expenses that exceed 7.5% of your adjusted gross income (AGI).[23]

24. Addiction Treatment

Speaking of drinking, you probably know that too much is bad for your health. Drinking, smoking and drug abuse are serious medical hazards, so the IRS has ruled that you can write off expenses related to quitting. Eligible deductions can include the cost of any products or programs designed to help you quit, including nicotine patches or other aids. In-patient treatment at a drug or alcohol facility including meals, lodging and some transportation expenses can also be deducted as medical expenses. Additionally, transportation to and from meetings like Alcoholics Anonymous or Narcotics Anonymous, if attended based on doctor’s orders, can also be written off.[24]

25. Makers of Fishing-Tackle Boxes

Makers of fishing-tackle boxes no longer have to pay a 10% excise tax on each box—a provision inserted into the 2004 jobs creation bill lowered the rate to 3%.[25]

And a Few Attempts at Tax Deductions that were Rejected by the IRS:

- 1. Carpet removal

An allergic taxpayer tried to deduct the removal of carpets as a medical expense. It was denied — as was the cost of installing hardwood floors in their place.[26]

- 2. Salad

The cost of lettuce & tomato was not allowed as a medical expense for a diabetic on a restricted diet. The same person also tried to deduct artificial sweeteners and reduced-salt foods. Nope![27]

- 3. Air-conditioned hotel room

A one-night stay in a hotel was not allowed as a medical expense for an asthmatic taxpayer with a broken air conditioner.[28]

- 4. Bath oil.

A dry-skinned taxpayer tried to deduct the cost of bath oils as a medical expense. Not allowed.[29]

- 5. Dentures

Though a set of false teeth enabled an actor to enunciate without a hiss, they were not allowed as a business deduction.[30]

- 6. Mink coat

Not allowed as a business deduction for taxpayer’s wife to wear to business functions.[31]

- 7. Arson

A Pittsburgh, PA owner of a failing furniture store paid an arsonist to burn down his store. He reported the insurance as income, but deducted the $10,000 paid to the arsonist as a “consulting fee”—and admitted fact that to the IRS on audit. Yeah.[32]

- 8. Racehorse

Another business owner once purchased his own racehorse and tried to claim it as a business expense. His justification was that he brought his business clients to the horse races to be entertained by watching his horse race.[33]

And Still More . . .

- A ballerina tried to deduct the cost of a tummy tuck.[34]
- One woman tried to write off Botox expenses as an “image enhancement” expense.[35]
- A pianist tried to claim manicures as a business expense.[36]
- One woman tried to deduct her gambling losses as a charity donation.[37]
- Many reasons for deducting the cost of a swimming pool were offered by various clients. (One filer failed to realize that he needed to actually have children and dependents in order to claim them.)[38]
- One filer tried to deduct tanning-bed expenses.[39]
- One woman hoped to add a deduction by writing off the cost of Zumba exercise classes.[40]
- Hair transplant: Most accountants are quick to notice when a client tries to shave a little off his or her tax bill. But Laura Cullen, a CPA in Fresno, Calif., admits even she did a double take when a new client tried to pull the hair over her eyes. “We had a client that had been transferred to the U.S. from another country. He was an educated, likable, sharp guy,” she recalls. “The first year I did his personal tax return, being aware that you could itemize your medical expenses, he asked me to expense his hair transplant. I had a heck of a time explaining why I couldn’t.”[41]
- Spatulas: “My client is a painter, and he gave us his airfare to Brazil as a deduction,” recalls Gail Rosen, a CPA in Martinsville, N.J. “When I questioned the airfare, he said he went to Brazil to get spatulas.”[42]